objective: three messages

RGGI Workshop on Electricity Markets, Reliability and Planning

Topic Session 3:

RGGI Design, Markets and Reliability – Issues Relating to

System Operations

Mark Babula – ISO New England

New York City – November 30, 2004

RGGI Workshop 11/30/04

ISO New England Inc. 2

Objective: Three Messages

1. Reliability is paramount

2. Fuel diversity is important

3. Maintaining reliability requires certain uneconomic units to operate.

Therefore… RGGI design needs to accommodate all three requirements.



Example: New England’s Electric Power System

• Serves 14 million people

• Peak demand: 25,348 MW on 8/14/02

(Lower Winter Peak)

• 350+ generating units = 31,000 MW

• 12 interconnections to neighboring

systems provides summer import

capability from New York ( 1,500 MW)

and Canada (2,400 MW)

320 mi.

400 mi.



ISO New England Inc.• Is Responsible for:

– Bulk power system reliability

– Deregulated wholesale market administration

– Regional transmission planning

• Is in transition to becoming a Regional Transmission

Organization (RTO)

– No change in market structure and operations

– Provides greater authority plus states advisory role



Time Scales: Reliability vs. Cap Compliance

• Reliability must be maintained at all times:

– Second by second / minute by minute / hour by hour

• CO2 Cap Compliance would have a longer time frame:– Monthly / Quarterly / Seasonal / Yearly

• RGGI Issue: Who is responsible for tracking, administering, and ensuring compliance with the periodic

CO2 Caps: the suppliers?..the ISO?..the States?..or some

combination?



Examples of Tools for Assuring Reliability:

• Real-time system security:– Out-of-merit dispatch order of generating units– Emergency Operating Procedures – Voltage reductions – Load curtailment

• Markets• System Planning:

– Resource adequacy– Transmission adequacy

• RGGI issues = Treatment of CO2 emissions: – During operational emergencies and transmission planning– In state siting procedures for new infrastructure

• The RGGI Cap must be capable of being reflected through the Markets & Operations



New England’s Fuel Diversity:1993 vs. 2003 Energy Mix

2003

Oil15%

Gas12%

Hydro7%

Net Interchange6%

Misc6%

Nuclear39%

Coal15%

1993

Sources: ISO NE 1993 Annual Report and

ISO NE Regional Transmission Expansion Plan 2004

Gas30.1%

Nuclear26.2%

Coal11.8%

Oil/Gas10.0%

Hydro5.7%

Oil5.6%

Misc.5.3%

Coal/Oil1.2%

Net Interchange

4.1%



Fuel Diversity

• RGGI Reference Case assumes:– New capacity is mostly gas-fired combined cycle technologies causing a projected

CO2 increase of ~20 million tons by 2020

– Meets the states’ RPS for renewables, projected improvements in efficiency use

• RGGI and energy facility siting issues: Only permit (or

give advantage to) non-CO2 emitting resources to satisfy

load growth?– Efficiency and conservation

– Wind, solar, & renewable biomass

– Nuclear

– Fossil fuels only if combined with 100% offsets

– CO2 issues in new fuel-delivery infrastructure (e.g., natural gas pipelines, LNG)



Reliability and Out-of-Merit Unit Operation

• Ensuring the reliability of transmission-constrained load pockets in New England may require out-of-merit units to operate in order to:– Cover generation and transmission outages (forced & scheduled) – Provide voltage and VAR support– Provide ancillary services (i.e. operating reserves: spin and non-spin)

• These are compensated through the market or by special contracts



Canadian Interchange and Leakage

1999

2000

2001

2002

2003

NB Imports

HQ Exports0

2000400060008000

10000120001400016000

GWH

Year

NEPOOL Canadian Transactions

NB Imports

NB Exports

HQ Imports

HQ Exports

Total Imports

Total Exports



NY & Canadian Interchange and Leakage

• Interchange is driven by energy economics

• Net interchanges have been ~ 4 – 6% of total energy

(historically even more)

• RGGI Issues: – How to account for “Good” and “Bad” interchange from a CO2

generation point of view?• Emissions of specific sources or

• System average?



CO2 Cap Compliance and Reliability

• From the viewpoint of system operations and reliability: Compliance flexibility is key for assuring reliability

• Implications for RGGI design – build in sufficient flexibility through:– Allocations – Treatment of trades– Creation of set-aside for “must-run” units operating for reliability– Siting low- or non-CO2 emitting resources to serve energy growth – Consider fuel diversity as essential feature of electric system

planning

Mark Babula(413) 535-4324

[email protected]

System PlanningISO New England Inc.

One Sullivan RoadHolyoke, Massachusetts

01040-2841www.iso-ne.com

objective: three messages

Documents